CLA-2 CO:R:C:F 952775 LPF
Mr. Ed Baker
A.N. Deringer, Inc.
30 West Service Road
Champlain, NY 12919-9703
RE: Classification of "Imagine and Me" educational kit; Heading
9503, HTSUSA, other toy; Heading 8524, HTSUSA, records, tapes
and other recorded media; GRI 3(b) set put up for retail
sale; Tariff preferences under CFTA; HRL 951507
Dear Mr. Baker:
This is in response to your letter of September 22, 1992,
submitted on behalf of Art Image Publications, Inc., regarding
the proper classification, under the Harmonized Tariff Schedule
of the United States Annotated (HTSUSA), of an "Imagine and Me"
educational kit. You submitted a sample with your request for a
binding ruling.
FACTS:
The merchandise at issue is an "Imagine and Me" educational
activity kit. It is comprised of various learning materials
including two teacher's guide books, a student's book, three
audio cassettes designed to accompany the books, printed matter
including art prints, illustrations, cards and geometric shapes,
fabric scarves (composed of 77 percent rayon and 23 percent
nylon), and a puppet figure with a stuffed head and legs, but
with an empty torso. All the components of the "Imagine and Me"
kit are manufactured in Canada except for the puppet and scarves
which are made in China and Japan, respectively. Furthermore,
Mr. Claude Jodoin, of Art Image Publications, explained
telephonically, on February 5, 1993, that the cassettes are
entirely comprised of Canadian materials and are recorded in
Canada. It is our understanding that the complete kit will be
imported from Canada to the U.S. in one retail package.
-2-
ISSUE:
Whether the "Imagine and Me" educational kit is classifiable
in heading 4901 as printed books and similar printed matter,
heading 8524 as records, tapes and other recorded media, heading
4911 as other printed matter, heading 6214 as scarves, or heading
9503 as other toys; and whether it is considered a "good
originating in Canada" for purposes of the United States - Canada
Free Trade Agreement (CFTA) and, thus, is eligible for
preferential tariff treatment.
LAW AND ANALYSIS:
Tariff Classification
The General Rules of Interpretation (GRI's) taken in their
appropriate order provide a framework for classification of
merchandise under the HTSUSA. Most imported goods are classified
by application of GRI 1, that is, according to the terms of the
headings of the tariff schedule and any relative section or
chapter notes. In the event that the goods cannot be classified
solely on the basis of GRI 1, and if the headings and legal notes
do not otherwise require, the remaining GRI's may then be
applied. The Explanatory Notes (EN's) to the Harmonized
Commodity Description and Coding System, which represent the
official interpretation of the tariff at the international level,
facilitate classification under the HTSUSA by offering guidance
in understanding the scope of the headings and GRI's.
The educational kit consists of various components which are
classifiable as follows: the teacher's guides and student's books
in heading 4901, the audio cassettes in heading 8524, the art
prints and illustrations in heading 4911, the non-knit scarves in
heading 6214, and the puppet in heading 9503. Chapter 85, Legal
Note 6 provides that: "[r]ecords, tapes and other media of
heading 8523 or 8524 remain classified in those headings, whether
or not they are entered with the apparatus for which they are
intended." The cassettes, therefore, are classified, pursuant to
GRI 1, in 8524, as records, tapes and other recorded media. The
applicable subheading is 8524.21.30. See Headquarters Ruling
Letter 951507, issued July 2, 1992.
However, since separate HTSUSA headings provide for each of
the other items, they are classified by applying GRI 3(a) which
explains, in pertinent part, that merchandise which is
classifiable under two or more headings is classified under the
heading which provides the most specific description of the
article. However, all such headings are regarded as equally
specific when each refers to only part of the items in a set put
up for retail sale.
-3-
In accordance with EN X to GRI 3(b), the merchandise is a set
since: (a) at least two of the items are classifiable in
different headings; (b) the merchandise consists of items put up
together to meet a particular need, specifically, to serve as an
educational device for children; and (c) the merchandise, in its
retail package, is ready for direct sale without repacking.
Because the educational kit is a set, and the headings under
which the items could be classified refer to only part of the
items in the set, we turn to GRI 3(b) to classify the
merchandise. This provides that the set is classified by the
item which gives the set its essential character. "Essential
character" is the attribute which strongly marks or serves to
distinguish what an article, or set, is. EN VIII to GRI 3(b)
explains that essential character may be determined by the nature
of the material or component, its bulk, quantity, weight or
value, or by the role of a constituent material in relation to
the use of the article.
Although the art prints and illustrations represent the
greatest value of the items and the puppet appears to represent
the greatest bulk, neither alone is dispositive of essential
character. Furthermore, based on use, no one item imparts
essential character; rather all the items function coequally to
create the educational kit.
Accordingly, GRI 3(c) explains that goods which cannot be
classified by reference to 3(a) or 3(b) are classified under the
heading which occurs last in numerical order among those which
equally merit consideration. The merchandise, therefore, is
classifiable in heading 9503, as other toys, the provision which
occurs last in numerical order. The applicable subheading is
9503.49.0020.
United States - Canada Free Trade Agreement
Articles which are imported from Canada may be entitled to
certain tariff preferences under the United States - Canada Free
Trade Agreement (CFTA) if the articles are "originating goods" as
defined by General Note 3(c)(vii)(B), HTSUSA. There are two
primary means in General Note 3(c)(vii)(B) by which articles
imported into the United States may be "goods originating in the
territory of Canada." General Note 3(c)(vii)(B)(1) provides for
goods "wholly obtained or produced in the territory of Canada
and/or United States." General Note 3(c)(vii)(B)(2) provides for
goods "transformed in the territory of Canada and/or the United
States."
-4-
The set contains a puppet and scarves which are manufactured
in third countries. Because the set contains foreign articles,
the merchandise is not "wholly obtained or produced in the
territory of Canada and/or the United States," in accordance with
General Note 3(c)(vii)(B)(1).
Furthermore, the merchandise, made of foreign materials, is
not transformed in Canada and/or the United States in accordance
with General Note 3(c)(vii)(B)(2). A transformation is evident
when a change in tariff classification occurs that is authorized
by General Note 3(c)(vii)(R), HTSUSA. In this instance, the
puppet is classified in subheading 9503.49.0020 when it enters
Canada. Upon importation to the United States the puppet, now
packaged with the other items in the set, remains classified in
subheading 9503.49.0020. No change in classification occurs and
the puppet is not transformed in Canada. Because the set is
classified according to the foreign puppet, the set is not an
article originating in the territory of Canada and is not
eligible for preferential tariff treatment under the CFTA.
We note that the audio cassettes, which are classified
separately in heading 8524, are "wholly obtained or produced in
the territory of Canada and/or the United States." Because the
cassettes are articles originating in the territory of Canada,
they are eligible for preferential tariff treatment under the
CFTA.
HOLDING:
"Imagine and Me" is not an originating good under General
Note 3(c)(vii)(B)(2), for purposes of the CFTA. The merchandise
is classifiable in subheading 9503.49.0020, HTSUSA, as "Other
toys...: Toys representing animals or non-human creatures (for
example, robots and monsters) and parts and accessories thereof:
Other, Toys not having a spring mechanism: Other." The general
column one rate of duty is 6.8 percent ad valorem.
The audio cassettes are originating goods under General Note
3(c)(vii)(B)(2) and are entitled to preferential tariff treatment
under the CFTA. They are classifiable in subheading 8524.21.30,
HTSUSA, as "Records, tapes and other recorded media for sound...:
Magnetic tapes: Of a width not exceeding 4mm: Other recordings."
The special column one rate of duty is 4.8 cents per square meter
of recording surface.
Sincerely,
John Durant, Director
Commercial Rulings Division